Lessons for a new CFO

​If you spend any time receiving daily alerts for job wanted postings, you likely know there are numerous companies looking for new finance leadership.  Lots of opportunity out there. 

So I wanted to give a few tips for a younger person that may be looking for a promotion to their first Chief Financial Officer (“CFO”) role, or perhaps you have landed that job and could use a few tips, especially for accounting professionals that are transitioning to the CFO role. 

Every company handles various tasks differently, and “pushes” down responsibility in different ways depending on the size of the company, available resources, management style, etc.  Therefore, the following is a list of a few things to think about, keeping in mind there are no “bright” lines:

1. Perspective – this is a job that looks forward, not backwards, much more than as a controller or other accountant.  A new CFO will need to have people that can prepare a trustworthy set of numbers so that you don’t have to get into weeds and “audit” the numbers. 
2. Communication – It is now your job to articulate financial reporting, including the story behind the financial results, new accounting standards, financings, metrics, etc.  Oftentimes the audience needs quick and easy to understand answers, so it is imperative that you be able to “make the complex simple”.
3. Decisions and ownership – as the lead financial officer, you now must make the hard decisions to help the health center operate effectively, including staffing and cost analysis, processes, etc.  You need to be able to assess what needs to be done, and hire the right people for the right tasks to get things done.
4. New things will keep you up at night – risk management, strategy, compliance, organizational effectiveness, to name a few.  You are no longer just a part of the process.  You DRIVE the process. 
5. Leverage – you as the new CFO probably need to think about leverage and delegation more than ever before.  I’ve worked with many accountants and controllers that can get deep into the weeds, many times rightfully so, as it is a necessary task.  Somebody has to make sure the accounting department is operating effectively and it often falls on the lead accountant.  That means doing whatever is necessary to ensure transactions are being processed properly, information is compiled for external reporting, etc.  Of course, the CFO may also need to dive in, but if the department is functioning optimally, the CFO can help to keep perspective of the forest instead of the trees.
6. Administrative matters – I just mentioned that a CFO will not get into the accounting weeds.  There are now new and different weeds – contracts, forecasting, investment portfolio management, capital planning and development, lease management, vendor relationships and management, technology, insurance matters, banking relationships, benefit plans, budgets, new service line development, alternative payment plan analyses, human resources, legal and compliance matters, debt financings, fraud prevention, board relations and communications, just to name a few. 

 
CFO’s can fail because they stay in the weeds, either due to style or necessity due to limited resources.  I believe in a very under-appreciated best practice that a second set of eyes can provide enormous benefit.  It is difficult to analyze a given set of facts if you have to compile the facts first.  For example, if a CFO has to compile a financial statement from scratch or has to trace numbers from financial reports to the underlying supporting documentation as a first review because the review has not been performed by a controller, then it is very difficult to perform a higher level “smell test” of the financial statements, which is key for ensuring accuracy and to begin to draw conclusions from the data. 

​The CFO role is a key role; it is very exciting and very challenging.  I encourage any new CFO to embrace the role and develop the habit of continuous lifelong learning.